Employee retention is important. Period. An employee retention rate is a clear marker of how a company is performing. If your productivity is up, it is likely your turnover rate is low—happy employees are more productive workers. If your company is losing revenue, high turnover could be to blame. Implementing a retention strategy is paramount to maintaining a workforce that is happy, works hard and cares about your company’s success.
What is employee retention?
Employee retention involves specific actions that companies implement to keep their employees motivated and focused. The idea is the more motivated and engaged workers are, the more likely they are to remain with a company, instead of looking at what the competition has to offer. Employee retention is more than just paying employees well (although that is part of it) but is also about hiring the right candidate, providing a warm welcome and offering benefits that help improve their daily lives. The better your retention strategy, the more loyal your employees will become and the easier it will be to recruit new ones.
How Retention Rates Impact Your Business
Improving retention rates are a top concern for companies and their respective HR departments. Without enough great talent, you can’t stay ahead of the competition. And if your HR department is consistently working to hire new employees, they won’t have time to focus on big picture objectives like developing employees to meet strategic goals.
According to a SHRM study, 47% of HR professionals said retention and turnover was a top workforce management challenge. The concern is not surprising. Turnover is not only costly, averaging about $4,000 to hire a new employee, but it can affect a company’s performance. If employees regularly must cover the work of someone who has quit, they can quickly get burned out. The morale at a company can drop fast when employees keep jumping ship. Improving employee retention needs to be a priority.
9 Ways to Improve Employee Retention
Employee retention strategies need to be woven throughout the talent management process. Retention needs to begin with hiring, continue through onboarding and be a part of ongoing employee development.
- Write specific job descriptions. When your job postings include more than just the basic information (position, responsibilities, etc.) potential hires get a better understanding of what it’s like to work for you. Include examples of your company culture and the unique benefits you offer. Potential hires who know what to expect, won’t be discouraged once they start.
- Use targeted job boards. Once you complete your job description, post it to boards that are best suited to reach your desired audience. A great ATS can specifically target candidates by industry, geographic location and candidate demographics like veteran status so your postings get in front of the people who are the most qualified.
- Rely on your current employees for recruiting. Employee referrals work. They almost always put the best candidates directly in front of you. Employee referral programs offer current workers incentives for influencing friends, family and acquaintances to apply for an open position. Your employees are the best ambassadors for your company. Any candidate referred will have more information about your company than you could put in a job posting. Plus the process can be much more economical than traditional recruiting methods.
- Make onboarding reassuring and welcoming. Unfortunately only 12% of employees believe their company does a good job at onboarding. Onboarding is the first impression your newly hired employee gets of your company. Not only should it cover your company’s policies and procedures, but it should reassure your new employee by helping them feel safe. Explain your company’s security procedures and safety precautions. Include information about where they should park and what to wear to help the first day go well. Ask the entire team to take part in the onboarding process to help cement relationships. A cloud-based onboarding process allows HR, managers and co-workers to touch base with employees before their first day. New hires can set up their personal information, upload documents and read and sign policy manuals so the work can begin on day one.
- Compensate employees regularly and fairly. While implementing retention strategies during the hiring stage attracts better candidates, compensation gets them to stay. Competitive pay reduces the chances of your best employees looking towards the competition. Compensation management software automates the process by giving employees raises and bonuses based on your structure. Compensation can include pay raises, one-time cash bonuses and profit sharing.
- Give retention bonuses. If your employee retention needs an immediate boost, consider offering retention bonuses. Retention bonuses are given to employees who stay with the company for a certain length of time. While retention bonuses aren’t as common as a one-time bonus, some companies are finding them successful at retaining critical personnel. To implement, decide how many years employees must have under their belt to receive this bonus and if it pays in increments like every five years.
- Offer benefits that help balance employees’ lives. Today’s employees are struggling to find a balance between their work and home lives. While perfect balance may be unrealistic, finding ways to blend work and home together is high on their wish lists. Examples of these benefits that integrate home and work include offering a permanent work from home option, varied start and stop work times, working early or late to cover doctor appointments or school visits. For employees that must work on-site, consider offering personal tech time breaks, allow employees to work together to self-schedule and provide a competitive amount of PTO.
- Manage their performance regularly. Employees who understand what they need to do to improve, become better at their jobs. Providing regular performance reviews allows them set goals and gives managers the ability to guide them towards achieving those goals. Performance management software can help organize and motivate employees by providing them with regular, actionable feedback. A centralized system can also spotlight those top performers who may make great future leaders. With tracking and reporting, employees always know how close they are to their goals and the rewards for reaching them.
- Continually develop your employees. Retention rates can improve when employees feel like they have a future with your company. Using a learning management system to provide training opportunities shows your employees you care about their career path at your organization. One in four baby boomers and gen X employees, and nearly half of millennials, say they’d leave their current positions for one that offered professional development, according to Gallup. Encourage obtaining certifications, send employees to conferences or allow them to attend webinars.
Now that you’ve identified retention strategies, pinpoint which will work for your employees by conducting stay interviews.
What is a Stay Interview?
A stay interview is a meeting between a manager and employee designed to learn what motivates an employee to stay with a company. Unlike an exit interview, which asks why an employee is leaving, stay interviews are done pre-emptively to make sure they stay. According to The Balance Careers, the results of a stay interview provide information about what your